Beet sugar refiner moves to Minnesota
California suffered a blow recently when the owner of the only beet sugar refinery in the state—located in Imperial Valley—announced plans to close the facility permanently.
Southern Minnesota Beet Sugar Cooperative, the owner of the Spreckels Sugar Company factory in Brawley, California, announced plans to close the 78-year-old facility and move its operations to an existing factory in Minnesota. The closure will mean the loss of more than 700 jobs in a region that desperately needs them.
The Spreckels Sugar Company was founded in San Francisco in 1896, but its Brawley, California, factory was bought by the Minnesota cooperative in 2005. About half of all sugar consumed in the United States comes from beets rather than sugar cane. Sugar refining is highly regulated and federal requirements are strict. The Southern Minnesota Beet Sugar Cooperative, based in Renville, said it was no longer “financially viable” to operate the California location.
Since 2000, 28 sugarbeet and sugarcane facilities have closed in the U.S., leaving 43 remaining, as they wrestle with the need for higher yield and more efficient facilities to survive. The Brawley facility was the last remaining sugarbeet processing facility in California.
Southern Minnesota Beet Sugar Cooperative, a farmer-owned producer of beet sugar, was founded in 1972. Its more than 500 shareholders grow approximately 3 million tons of sugarbeets each year, producing up to 1 billion pounds of pure white sugar.
On the Brawley closing, Paul Fry, the company’s president and CEO, said in a news release, “This was a difficult decision brought about by factors largely out of our control. Despite our extensive investments in the facility, the economic challenges facing the sugar industry have been building for several years as the costs of operating the Spreckels facility have continued to escalate.”
“Over the past several years, the U.S. sugar industry has faced various external factors that have hurt the industry, including the uncertainty in the macroeconomic environment, declines in sugar and co-product prices, and the impact of inflation since the pandemic—all affecting sugar factories across the country. The industry also faces added pressure from foreign sugar sources in domestic markets due to the increased volume of Tier-2 imports.
“On top of this, the U.S. Sugar Program and its out-of-date loan rates for refined beet sugar have neither kept up with inflation nor the rising costs of production. The result is that the Spreckels facility has suffered cumulative losses over more than a decade. Taken as a whole, it was determined these factors make the future of the Brawley facility not financially viable.”
David Murray can be reached at [email protected].
